Budget 2018

Budget 2018: MSP for kharif is proposed to be fixed at 1.5 times the cost of production. To ensure adequate and timely farm credit, the target for agriculture credit has been raised to Rs 11 lakh crore for FY19 from Rs 10 lakh crore last year.

Budget 2018: THE FInance minister was adversely positioned to present a landmark Budget. As the 2018 Budget comes against the backdrop of a difficult situation post-demonetisation, GST implementation, Gujarat election results and the upcoming general elections in 2019.

Budget 2018: In order to enhance the accessibility of quality medical education and healthcare, the government plans to set up 24 new government medical colleges and hospitals and upgrade existing district hospitals in the country.

Budget 2018: The change has been only in the nomenclature of duty from ‘additional excise duty’ to ‘road and infrastructure cess’. While reducing the excise duty amount by Rs 2 per litre on petrol and diesel, there is an increase in the rate of road and infrastructure cess to Rs 8 per litre without any change in the total duty.

Budget 2018: Exports create massive employment opportunity, particularly in labour-intensive sectors. The fixed-term employment facility for all sectors will benefit exporters, as this has been their long-standing demand.

Budget 2018: While the Budget did not touch upon legislative changes required in IGST and CGST Acts, the fact that increase in customs duty rates would garner significant revenues, which would offset the decline in GST revenues, is undeniable.

Budget 2018: The telecom sector is amongst the highest FDI contributors to the economy (Rs 1.3 lakh crore), and the second-largest investor in infrastructure (Rs 9.2 lakh crore). It contributes 6.5% to the GDP, paying Rs 70,000 crore in FY17 only and employing 40 lakh people directly and indirectly.

Budget 2018: For the last budget in this term of the government, the FM has done well to bring back the focus on sectors that provide employment and livelihood to the largest sections of the population.

Budget 2018: The action plan is aimed at reducing the out-of-pocket spending on health to 50% by 2020 from 63.4% at present. For both of these targets to be reached, the Budget had to signal the beginning of a steady annual rise in the allocation for health.

Budget 2018: The idea is to deepen the corporate bond market and nudge companies to diversify their sources of funding. Finance minister Arun Jaitley said the Reserve Bank of India has issued guidelines to nudge corporates access the bond market.

Budget 2018: Bond markets sold off sharply on Thursday spooked by higher than expected fiscal deficit estimates and fears that food inflation would rise with stronger support for crop prices via minimum support prices (MSP).

Budget 2018: The government, he said, has also initiated the process of strategic disinvestment in 24 CPSEs, including the strategic privatisation of Air India. Strategic divestment could be a key revenue mobiliser in the coming fiscal as concluding such deals should be easier.

Budget 2018: The Budget attempts to juggle the competing interests of various people to maximise political, fiscal and economic capital. The Budget made some interesting changes to financial regulations.

Budget 2018: A key new scheme was introduction of a national health protection scheme to cover 100 mn families and 500 mn beneficiaries. The aim is to provide Rs 5 lakh benefit per family per year for hospitalisation. How this scheme will be rolled out and how it will be funded will be important to watch.

Budget 2018: Currently, LTCG tax on debt funds is 20% with inflation indexation benefit, while equity holdings of more than one year did not attract LTCG tax. All LTCG gains on equities till January 31, 2018 have been grandfathered thus ensuring the 10% tax is well-balanced.

Budget 2018: Advent of GST and exclusion of petroleum sector from its purview has meant much higher costs for the domestic oil industry. While the government is making efforts to align states and bring the petroleum sector under GST, it should take measures to clarify that there will be no GST on royalty and cost recovery.

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